“2014 will be remembered as the year in which we rebranded our company as CVS Health and made the right decision to exit the tobacco category, better aligning our company with patients, payors, and providers,” Larry Merlo said.

CVS, which stopped selling cigarettes and related products in September, previously generated an estimated $2 billion in annual tobacco sales. But sales in the pharmacy segment alone in the fourth quarter jumped 21.7 percent to $24 billion buoyed by an early flu season with an ineffective vaccine that caused flu victims to search CVS for other treatment options. CVS also saw increased paying customers under the Affordable Care Act.

The newly insured Obamacare customers and increased drug sales helped overcome a dip in revenue from the front-end of the store where customers used to buy cigarettes and other tobacco products. And though fourth-quarter front end sales were soft from the loss of those customers, margins in the front of the store improved, Merlo said.

The end of tobacco sales has improved the company's image and helps in discussions attracting employers to its pharmacy networks and its prescription management business. In the fourth quarter, pharmacy benefit management sales were up 21.7 percent to nearly $24 billion.

The CVS decision has also put pressure on other retailers like Walgreens Boots Alliance (WBA) and Wal-Mart (WMT). "It’s opening up some doors to some unique opportunities," Merlo told analysts.

Looking ahead, CVS didn't expect to miss a beat in 2015 with the company confirming previous guidance for the full year and first quarter. It expects to earn between $5.05 to $5.19 for the year.

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